Darden CEO Clarence Otis has noted that Red Lobster has been unable to capture higher-income customers.

But the company sees more potential in fixing Olive Garden, which it says fits with its other, smaller restaurant chains that cater to diners willing to spend more.

The company reworked the logo for the Italian food chain and has been adding lighter menu items, as well as smaller dishes that it says better fit with eating trends.

Investors have challenged Darden's plans to sell only Red Lobster, saying that the company should separate Olive Garden and Red Lobster as a pair from its other, more successful chains, which include Longhorn Steakhouse and Capital Grille.

There are about 700 Red Lobster locations and 830 Olive Gardens in North America.

After the transaction costs, Darden said it expects proceeds of $1.6 billion, of which $1 billion will be used to retire outstanding debt. The company said it expects the deal to close in its first fiscal quarter.

Shares of Darden, based in Orlando, Florida, slipped 1 percent to $50.10 in premarket trading.